Tishman Speyer Entering Austin with Office Purchase, Market briefs

In Austin, Tishman Speyer, a major Manhattan-based developer, has entered the Austin market with the purchase of The Foundry office complex in East Austin.

Tishman Speyer owns Rockefeller Center in New York, in addition to holdings in 28 key markets across the United States, Europe, Asia and Latin America.

“This is our first investment in Austin, but we expect it won’t be our last,” Tishman Speyer President & CEO Rob Speyer. “Austin is taking its place as one of America’s most desirable locations, especially for tech talent. And within the market, East Austin is the fastest growing and most dynamic multi-use community. That’s exactly where we want to be the landlord of choice.”

In the last year, Austin has been attracting a number of tech companies from California, including the headquarters of Oracle. Samsung has purchased land northeast Austin where it is slated to construct a $17 billion manufacturing plant. And Tesla is building a 4 million SF vehicle factory in East Austin. Plus, Tesla’s CEO Elon Musk, who rivals Jeff Bezos as the richest man in the world, recently moved his personal residence to Austin from California.

“Tishman Speyer is focusing on markets where the best tech entrepreneurs are collaborating with leading academic institutions. Going forward, Austin will be in our portfolio alongside Boston, San Diego, the Bay Area and more,” Mr. Speyer said.

The Foundry is a two-building office property totaling 240,000-SF in East Austin near the corner of Fourth and Comal street. The project is a block from the Metro Rail stop at Plaza Saltillo and is adjacent to the Lance Armstrong Bikeway.

The Foundry buildings were developed Austin-based developer/investor Cielo Property Group, which recently developed downtown Austin’s 29-story Third + Shoal office building that is occupied by Facebook.

The Foundry buildings were designed by Sixth River Architects (Foundry I) and Michael Hsu (Foundry II). Based in Austin, Hsu has been selected as the architect for a number of new Texas multi-use and retail/restaurant properties recently, including the food hall at the new Bank of America tower in downtown Houston.

The Foundry offers large floorplates, onsite amenities such as fitness centers, bike storage, and outdoor terraces on every floor.

Cielo will act as property manager on Tishman Speyer’s behalf, while leasing responsibilities will be handled by CBRE.

Vice Chairman Mike McDonald and Managing Director Katy Jane Jenevein of Cushman & Wakefield represented the seller in this transaction.

Tishman Speyer closed on the purchase of the Foundry I building on Wednesday. The purchase of Foundry II will close when the building is delivered in May 2021.

“The Foundry is the most exciting new property in the East Austin submarket, in a city where tech companies have been relocating their headquarters or adding facilities at an unprecedented rate,” said Ryan Botjer of Tishman Speyer. “Foundry I was nearly leased up quickly after completion and Foundry II has been partially pre-leased.”

Tishman Speyer has previously operated in Texas. Years ago, it developed the 20-story Briar Lake Plaza office building in Houston.